Operations analysis for each services vendor date from 2003 through 2016, with market projections cast out to 2020.

The opportunity for CDN and related telecom, networking and compute platform service vendors remains large, as geographical and operational economies of scale compel industry players to get big or get bought out.

Throughput volumes, particularly video, continue to swell across the globe, including China and India, and account win competition remains red hot, thrusting the sector into another round of consolidation in 2016, with CenturyLink, ChinaNetCenter and StackPath stepping up as major consolidators.

Akamai Technologies has been one of the most aggressive acquisitors in the sector, buying across a wide range of product solutions (from pure play CDN, to security, acceleration and OTT software), augmenting its internal development stack.

A spend/cost analysis associated with digital video hours delivered in 2016 though CDN and self-hosting platforms (i.e.; Facebook, YouTube, Netflix, Hulu, Instagram and Twitter) based on gigabytes transferred and Mbps pricing (retail and backhaul) leading to total available commercial market value is included.

CDN gross margins range from 40% to 65%, while the largest components to COGS continue to be bandwidth and co-location fees, even as bandwidth prices continue to fall at the retail level, reaching as low as $0.01 per gigabyte for an aggressively priced volume-based contract signed this year.

A total of $8.3 billion in CapEx was invested in infrastructure updates/expansion, including Amazon in 2016. The self-hosting giants, including Microsoft, invested $16 billion in infrastructure in 2016.

CDNs also benefit from growth in the self-hosted part of the market, and provide network redundancy/failover, hosting, transport, IP services and multiple backend services support to OTT operators like Netflix.

CapEx investments are aimed at scaling the network and cost control/efficiency improvements. Upgrades include servers, faster chips, better memory and capital software developed in-house or acquired. CDNs report that improving the quality of end user experience is a high priority.